About the Bank
Bank of Tanzania Act, 1995 (Repealed)
PRELIMINARY
1. (1) This Act may be cited as the Bank of Tanzania Act, 1995
(2) This Act shall come into operation on such
date as the Minister shall, by notice
published in the Gazette, appoint.
2. This Act shall extend to Tanzania Zanzibar as well as to Mainland Tanzania.
3. In this Act, unless the context otherwise requires—"the Bank"
means the Bank of Tanzania established by this act; bank", except when used
in the expressions "central bank" and "foreign bank", means
a financial institution authorised to receive money on current account subject
to withdrawal by cheque; "banking business" means—
the business of receiving funds from the general public through the
acceptance of money deposits payable upon demand or after a fixed period after
notice, or any similar operation through frequent sale or placement of bonds,
certificates, notes or other securities, and the use of such funds either in
whole or in part for loans or investments for the account and at the risk of the
person doing such business; and
any other activity recognised as customary bank practice which a financial
institution engaging the activities described in paragraph (i) may be
additionally authorised to do by the Bank; "the Board" means the Board
of Directors of the Bank; "member" in relation to the Board means the
Governor, the Deputy Governor, the Principal Secretaries to the Treasuries of
the Governments or a Director; "the Minister" except where otherwise
specified refers to the Minister for the time being responsible for financial
matters of the United Republic of Tanzania; the Governments" refers to the
Governments of the United Republic of Tanzania and the Revolutionary Government
of Zanzibar;"financial institution" means any person authorised by or
under the Banking and Financial Institutions Act, 1991, to engage in banking
business not involving the receipt of money on current account subject to
withdrawal by cheque; "Director" means a member of the Board other
than the Governor, the Deputy Governor or Principal Secretaries to the
Treasuries of the Governments; "foreign exchange" means currencies and
units of accounts other than the currency of the United Republic and claims in
and to such currencies and units of accounts;"public authority"
means—
(a) the authority for any political sub-division of the United Republic
(including any city, municipal, town or district council);
(b) any common services authority of which Tanzania is a member with other
countries;
(c) any corporation, agency or enterprise specified for the purposes of this Act
by the Bank.
PART II
THE CENTRAL BANK
(a) Establishment and functions of the Bank
4. There shall be established a corporation, to be known as the Bank of
Tanzania, which shall—
(a) have perpetual succession and a common seal;
(b) in its corporate name be capable of suing and being sued; and
(c) subject to the provisions of this Act, be capable of acquiring, holding and
alienating any movable or immovable property.
5. (1) The principal functions of the Bank shall be to exercise the functions of
a central bank and, without prejudice to the generality of the foregoing, to
formulate, implement and be responsible for monetary policy, to issue currency,
to regulate and supervise banks and financial institutions and to manage gold
and foreign exchange reserves of Tanzania .
(2) The Bank shall promote sound monetary, credit and banking conditions
conducive to the development of the economy of Tanzania.
(3) The primary objective of the Bank shall be to formulate and implement
monetary policy directed to the economic objective of maintaining price
stability conducive to a balanced and sustainable growth of the national economy
of Tanzania.
(4) Without prejudice to its primary objective as stated above, the Bank shall
support the general economic policy of the Governments.
6. (1)The Bank shall at intervals of not more than six months after the
submission of each preceding statement, submit to the Minister a Monetary Policy
Statement for the next six months or for such other period as may be specified
by the Minister.
(2)The Minister shall submit to the National Assembly not later than at its
subsequent session the Statement submitted in terms of the provisions of
subsection.
(3)The Bank shall thereafter at intervals of not more than six months after the
submission of the preceding report submit to the Minister progress reports on
the implementation of monetary policy and reports on the outlook for the future,
and the Minister shall in turn submit the said reports to the National Assembly
at its subsequent session.
(4)The Monetary Policy statement to be submitted under this section shall—
(a) specify the policies and means by which the Bank intends to achieve the
policy targets;
(b) state the reasons for adopting those policies and means;
(c) contain a statement of how the Bank proposes monetary policy to be
formulated and implemented during the next twelve months;
(d) contain a review and assessment of the implementation by the Bank of
monetary policy during the period to which the preceding policy statement
relates.
7. (1) There shall be regularly held consultations between the Governments and
the Governor on monetary policy.
(2) In the event of fundamental and irreconcilable differences between the
Minister and the Governor over monetary policy, the Minister shall by Order
published in the Gazette direct the Governor to formulate and implement monetary
policy along the position of the Minister for a period not exceeding twelve
months or any other period as shall be specified in the Order.
(3) Except as provided herein above nothing in this section shall be construed
as to limit or affect the obligation of the Bank to
carry out its primary objective.
(b) Management of the Bank
8. There shall be a Board of Directors of the Bank and subject to this Act, the
Board shall be responsible for determining the policy of the Bank, for the
approval of its budget and for such other functions as are specifically
conferred or imposed upon the Board by this or any other written law.
9. (1) The Board shall consist of:
(a) the Governor, who shall be Chairman;
(b) the Deputy Governor, who shall be Deputy Chairman;
(c) the Principal Secretary to the Treasury of the Government of the United
Republic of Tanzania and the Principal Secretary to the Treasury of the
Revolutionary Government of Zanzibar; and
(d) six other Directors appointed by the Minister.
(2) The Governor and the Deputy Governor shall be appointed by the President and
each shall hold office, unless he sooner dies or resigns or vacates or is
removed from his office for good cause or is disqualified, hold office for a
period of five years and shall be eligible for re-appointment:
Provided that no Governor or Deputy Governor shall hold office for more than two
terms.
(3) The Directors appointed by the Minister shall each hold office, unless he
sooner dies or resigns or vacates or is removed from his office in accordance
with section 10, for a term of three years, and shall be eligible for
re-appointment, provided that no Director shall hold office for more than three
terms.
(4) The Directors appointed by the Minister under paragraph (d) of the
subsection (1) shall be from amongst persons who are knowledgeable or
experienced in economics, business and finance, banking, corporate law,
accountancy and agricultural and industrial development and other disciplines
relevant to the functions of the Bank.
(5) In appointing Directors of the Bank the Minister shall, without prejudice to
the provisions of subsection
(4), have regard to the need to ensure that the Governments are equitably
represented on the Board.
(6) In considering the appointment or reappointment of a person to the office of
Director of the Bank, the Minister shall have regard, in relation to that
office, to the likelihood of any conflict arising between the interests of the
Bank and any interests which that person has or represents.
10. (1) No person shall be qualified to be appointed a member of the Board, or
alternate for a member, if he is:-
(a) a member of the National Assembly or the House of Representatives, or member
of a local Government authority;
(b) a person who is a civil servant within the meaning of this term in the Civil
Service Act, other than the Principal Secretary to the Treasury of the
Government of the United Republic of Tanzania and the Principal Secretary to the
Treasury of the Revolutionary Government of Zanzibar;
(c) a director, officer, employee, consultant, lawyer, agent or shareholder of a
bank or a financial institution in respect of which the Bank may exercise a
regulatory power, under Part IV;
(d) an office bearer of any of the political parties operating in Tanzania.
(2) A member of the Board or his alternate shall vacate his office if—
(a) he acquires any attribute which, were he not a member, would disqualify him
for appointment under subsection (1) of this section;
(b) he becomes bankrupt or suspends payment or compounds with his creditors;
(c) he is adjudged or otherwise declared to be of unsound mind; or
(d) he is convicted of a felony or any offence involving fraud or dishonesty; or
(e) he is absent, without the leave of the Board, from three consecutive
meetings of the Board.
11. (1) The Board shall meet as often as may be required for the conduct of the
business and affairs of the Bank, but not less frequently than once in every two
months.
(2) Meetings of the Board shall be convened, and notice given in accordance with
the By-laws of the Bank and, in addition, the Governor (or in his absence, the
Deputy Governor) shall convene a meeting of the Board within a reasonable time
of a requisition in that behalf by any member of the Board.
(3) The quorum at meetings of the Board shall be six members:
Provided that—
(a) There shall be no quorum unless either the Governor or the Deputy Governor
is present at the meeting.
(b) Where in the opinion of the Governor (or in his absence, the Deputy
Governor) any matter or business is of an unusually urgent nature which cannot
await the convening of a meeting consisting of such quorum (such opinion to be
recorded in the minutes of the Board) the matter may be decided at a meeting of
the Governor (or in his absence, the Deputy Governor) and the Principal
Secretary to the Treasury of the United Republic of Tanzania and such decision
shall be as valid and binding on the
Bank as if it were a decision of a meeting consisting of such quorum and every
such decision shall be reported to the Board at its next regular meeting
(4) The Principal Secretary to the Treasury of the United Republic of Tanzania
and the Principal Secretary to the Treasury of the Revolutionary Government of
Zanzibar may appoint in writing persons in the civil service to be their
representatives at any meeting of the Board; and such representatives shall, at
any meeting for which they are appointed, have the powers of the said Principal
Secretaries in their capacities as members of the Board.
(5) Subject to the provisions of subsection (7), questions arising at meetings
of the Board shall be decided by the votes of the majority of the members
present and voting, and, in the event of an equality of votes, the Chairman (or
in his absence, the Deputy Chairman) shall have a second or casting vote.
(6) A Director who is interested in any matter involving the Bank, or in the
exercise or proposed exercise by the Bank of a power, shall declare that
interest at every meeting of the Board at which that matter or the exercise or
proposed exercise of the power, is considered by the Board, and the Director
shall not be entitled to attend and vote, or be counted in a quorum present, at
a meeting at which the matter or the exercise or proposed exercise of the power,
in which the Director has interest is considered.
(7) The Chairman (or in his absence the Deputy Chairman), or save for matters
related to formulation and implementation of monetary policy, the Principal
Secretary to the Treasury of the United Republic of Tanzania or his
representative, may require that the decision on any question be postponed to a
meeting of the Board to be held not less than seven days after the meeting at
which the requirement is notified; and where such a requirement is made, the
question shall be postponed, without vote, to the next such meeting unless the
person making the requirement consents to its being decided earlier.
(8) Subject to the provisions of subsection (3), no act or proceeding by the
Board shall be invalidated by reason of the existence of a vacancy among the
members, and all acts done by a person in good faith as a member of the Board
shall be valid notwithstanding that some defect in his appointment or
qualifications be afterwards discovered.
12. (1) There shall be a Standing Committee of the Board composed of the
Governor, who shall be Chairman (or in his absence, the Deputy Governor), the
Principal Secretary to the Treasury of the United Republic, the Principal
Secretary to the Treasury of the Revolutionary Government of Zanzibar or their
representatives appointed by them in accordance with subsection (4) of section
11 and not more than two members of the Board appointed in that behalf by the
Board.
(2) The Board may by resolution delegate to the Standing Committee upon such
terms and conditions as the Board may determine, any of the functions of the
Board under this Act, other than the power—
(a) to approve the budget of the Bank under Section 88;
(b) to exercise the functions relating to allocation of profits under subsection
(2) of section 19.
(3) The Committee shall not have the power to delegate any of its functions.
(4) The Standing Committee shall exercise the function delegated to it under
subsection (2) of this section during the intervals between the meetings of the
Board, and shall exercise those functions in accordance with any directions
given in that behalf by the Board.
(5) The Standing Committee shall meet as often as may be necessary for the
performance of its functions, and shall promptly submit to the Board a report of
its proceedings after each meeting.
(6) The quorum at meetings of the Standing Committee shall be three members one
of whom shall be the Governor or in his absence the Deputy Governor.
(7) Subject to the provisions of this Act and to any directions given by the
Board in that behalf, the Standing Committee may regulate its proceedings.
13. (1) The Board may appoint such other committees of the Board as it may deem
fit. The Board shall, subject to the provisions of this Act, specify the
composition and functions of every committee appointed under this section and
the terms and conditions upon which the committee shall exercise its functions.
(2) Every committee appointed under this section shall report to the Board on
all the proceedings and actions of the committee, and the Board may reverse or
vary any decision of the committee or may give such directions affecting any
action of the committee as the Board may deem fit in the circumstances of each
case.
(3) Subject to the provisions of this Act and to any directions given by the
Board in that behalf, a committee appointed under this section may regulate its
proceedings.
14. (1) Subject to the provisions of this Act, the management of the Bank and
the direction of its business and affairs shall be vested in the Governor and
the Governor shall, in the exercise of such functions of management and
direction, conform with the policy determined by the Board.
(2) The Governor shall have power to exercise and perform all the functions,
powers and duties of the Bank, other than any function specifically conferred on
the Board, and to authorize expenditure within the budget approved by the Board
.
(3) The Governor shall be the principal representative of the Bank and shall, in
such capacity, have authority—
(a) to present the Bank in its relation with other institutions, including the
Government;
(b) to represent the Bank, either personally or by advocate or other counsel, in
any legal proceedings to which the Bank is a party;
(c) to sign, solely or jointly with other persons, agreements concluded by the
Bank, notes or securities issued by the Bank, reports, balance sheets and other
financial statements, correspondence and other documents of the Bank;
(d) to delegate any authority provided for in this subsection, including the
power of delegation to any member of the Board or other officer of the Bank.
(4) The Deputy Governor shall-
(a) subject to the general supervision of the Governor, be responsible for the
day-to-day management, business and affairs of the Bank;
(b) perform such other duties as may be imposed upon him from time to time by
the Governor.
(5) The Deputy Governor shall have full power to act for the Governor in the
absence of the Governor, and the fact that the Deputy Governor so designated
exercises any powers or functions of the Government shall be conclusive proof of
the authority to do so and no person shall be concerned to inquire whether the
occasion for doing so has arisen or has ceased.
(6) The exercise by the Deputy Governor of any function of the Governor shall in
the absence of proof to the contrary, be deemed to be a valid exercise of such
function pursuant to subsection (5).
(7) The Governor and the Deputy Governor shall, while in the service of the
Bank, work full time and shall not, while holding their respective offices,
occupy or hold any other paid office; or employment or engage in any
professional or private enterprises activities.
Provided that nothing in this subsection shall prohibit either of them from—
(a) becoming or acting as a governor, director or member of the Board of any
international Bank or monetary authority to which the Government shall have
adhered or give support or approval; or
(b) becoming or acting as a director of any corporation in Tanzania which the
Bank may promote under section 57.
(8) The President may specifically exempt any transactions or activities from
the restrictions of subsection (7).
15. (1) The Governor and the Deputy Governor shall be paid and accorded by the
Bank such salaries, allowances (including retirement allowances) as may be
determined from time to time by the Board; and the salary, allowances and other
terms of service of the Governor or the Deputy Governor shall not be reduced or
otherwise diminished during their term of office.
(2) The Directors of the Bank shall be paid by the Bank such fees and allowances
as may be determined from time to time by the Board after consultations with the
Minister.
(3) The Bank shall pay the Directors travelling and out of pocket allowances
incurred in carrying out their duties.
16. (1) Subject to the general terms and conditions of service and to the
establishment prescribed by the Board, the Governor shall be responsible for the
appointment, termination of appointment and discipline of the staff of the Bank.
(2) The powers of the Board to make provisions for the staff of the Bank shall
include power to provide for benefits for or in respect of those of its staff
who die or retire, and their surviving dependants.
17. Except for the purposes of the performance of his functions, or when so
required or authorized by the Board, or when so required by law, no member of
the Board or of the staff of the Bank shall disclose any information relating to
the Bank or to any transaction or customer of the Bank which he has acquired in
the course of his duties.
(c) Capital, reserve and accounts of the Bank
18. (1) The authorized capital of the Bank shall be ten billion shillings. The
authorised capital of the Bank may be increased by such amount as shall be
determined by the Board by Notice published in the Gazette.
(2) The capital of the Bank will be subscribed and held only by the United
Republic of Tanzania.
(3) The Bank may, having regard to the amount by which the value of the assets
of the Bank exceed its liabilities increase its paid up capital by such amount
payable out of the General Reserve Fund as the Board shall by Order published in
the Gazette direct.
(4) The paid up capital of the Bank shall not be reduced.
19. (1) The Bank shall establish and maintain a General Reserve Fund.
(2) Within three months of the close of each financial year, after allowing for
the expenses of operation during that year, and after making provision for any
payment charged on the profits by section 20, bad and doubtful debts,
depreciation of assets, contributions to staff superannuation funds, carry-over
into the next financial year and such other contingencies and accounting
provisions as are customarily made by banks—
The Bank shall transfer to the General Reserve Fund twenty five percent of
the net profits until such time that the total capital of the Bank reach a sum
equivalent to at least ten percentum of the total assets of the Bank less its
assets in gold and foreign currencies. Thereafter, the Bank shall transfer not
less than five percent of its net profits to the General Reserve Fund.
The remainder of the net profits of the Bank shall be paid into the
Consolidated Fund, subject to the condition that if at the end of any financial
year any of the Governments is indebted to the Bank, the Bank shall first apply
the remainder of its net profits to the reduction or discharge of the
indebtedness; and thereafter such amount as relates to the net profits of the
Bank in the relevant financial year shall be paid out of the consolidated Fund
to the Treasury of the Government of the United Republic of Tanzania and the
Revolutionary Government of Zanzibar in accordance with the formula agreed upon
from time to time by the Governments.
(3) (a) Profits or losses from any revaluation of the Bank's net assets or
liabilities in gold, foreign exchange or foreign securities or any
internationally recognised reserve asset as a result of any change in the par or
other value of any currency unit shall be excluded from the computation of the
annual profits and losses of the Bank. All such first mentioned profits or
losses shall be transferred to a special account to be called the Revaluation
Account.
(b) The loss arising from any revaluation as aforesaid shall be set off against
any credit balance in the Revaluation Account and, notwithstanding any other
provision of this Act, if such balance is insufficient to cover such loss, the
same shall be charged upon, and paid out of, the Consolidated Fund.
Provided that where in pursuance of the provisions of this subsection, any sum
is paid out of the Consolidated Fund, it shall be repaid to the Consolidated
Fund out of any subsequent credit balance in the Revaluation Account and such
repayment shall be a first charge on the said account.
(c) Any credit balance in the Revaluation Account at the end of each financial
year of the Bank shall be applied first to repay sums paid out in terms of the
provisions of subsection (2) in such amounts as the Board may prescribe.
20. (1) The amount of any net loss of the Bank in excess of the moneys standing
to the credit to the General Reserve Fund of the Bank shall be charged upon, and
paid out of, the Consolidated Fund, without further appropriation than this Act.
(2) Where, in pursuance of subsection (1) of this section, any sum is paid out
of the Consolidated Fund, the Bank shall out of its subsequent profits repay the
same to the Consolidated Fund, and such repayment shall be a first charge on the
profits of the Bank.
21. (1) The financial year of the Bank shall be the same as the Government's
financial year and the accounts of the Bank shall he closed at the end of each
financial year.
(2) The Banks shall cause true and full accounts and records to be kept of all
its transactions, and the books of accounts and records shall be kept at its
head office and shall be open at all times to the inspection of the members of
the Board.
(3) Notwithstanding anything contained in the Exchequer and Audit Ordinance, the
accounts of the Bank shall he audited annually by such auditor as the Board
shall appoint.
22. (1) The Bank shall submit to the Minister within three months after the
close of each financial year, a report of the Bank's operations throughout the
year, together with the Balance Sheet and the Profit and Loss Account for the
year certified by the auditor; and the Minister shall lay a copy of that report
before the National Assembly.
(2) After a copy of the report has been submitted the Minister it shall be
published by the Bank.
(3) In addition to the report published by the Bank pursuant to the
foregoing provisions of this section, the Bank may issue such other publications
as it considers to be in the public interest
(d) Supplementary
23. The Bank may establish offices and branches at such places both within and
outside Tanzania as it considers necessary .
24. The Bank may appoint agents and correspondents both within and outside
Tanzania.
25. (1) The Bank shall be exempt from payment of an taxes, levies or duties in
respect of its profits, operations, capital, property or documents or any
transaction, deed, agreement or promissory note to which it is a party.
(2) The Bank shall be exempt from the payment stamp or other duties in respect
of notes and coins issued as currency under this Act.
26. The Companies Ordinance and the Companies Decree shall not apply to the
Bank, and the Bank shall not be placed in liquidation or wound up except
pursuant to and in such manner as may be provided by an Act of Parliament.
27. The Board may make By-laws for the good order and management of the Bank,
but, notwithstanding anything contained in the Interpretation and General
Clauses Act, it shall not be necessary for such By-laws to be published in the
Gazette.
PART III
CURRENCY
(a) Currency and its issue
28. The unit of currency in Tanzania shall be the shilling, each shilling being
divided into one hundred cents.
29. The Bank shall have the sole right to issue bank notes and coins in and for
Tanzania and, the bank notes and coins issued by the Bank shall be the only
legal tender in Tanzania.
30. (1) Bank notes and coins issued by the Bank—
(a) shall be in such denominations of the shilling or fractions thereof
expressed in cents; and
(b) shall be of such materials, forms and designs, shall bear such inscriptions
and devices, and shall have such other characteristics, as the Bank, with the
approval of the Minister, shall determine.
(2) The Bank shall give notice in the Gazette of the denominations and other
characteristics of the bank notes and coins which it issues.
31. (1) Subject to the provisions of this section—
(a) bank notes issued by the Bank shall be legal tender at their face value for
the payment of any amount;
(b) coins issued by the Bank shall, if they have not been tampered with, be
legal tender at their face value—
in the case of a shilling, or any multiple of a shilling, for the payment of
any amount;
in the case of coins having a face value of fifty cents or below, for the
payment of any amount not exceeding ten shillings.
(2) The Bank shall have power, on giving reasonable notice in the Gazette, to
call in any notes or coins issued by it on payment (subject to the provisions of
section 32) of the face value thereof; and any notes or coins with respect to
which a notice shall have been given under this subsection shall, on the
expiration of such notice, cease to be legal tender.
(3)Nothing in this section shall be construed as precluding the Bank from making
payment for any notes or coins called in accordance with subsection (2) which
are delivered to the Bank after they have ceased to be legal tender.
32. (1)No person shall be entitled to recover from the Bank the value of any
lost, stolen or imperfect bank note or coin, or of any bank note that has been
mutilated, or of any coin that has been tampered with.
(2)The circumstances in which and the conditions and limitations upon which, the
value of any lost, stolen or imperfect notes or coins, mutilated notes or coins
which have been tampered with may be refunded as of grace by the Bank shall be
within the absolute discretion of the Bank.
33. For the purposes of this Act, a coin shall be deemed to have been tampered
with if the coin has been impaired, diminished or lightened otherwise than by
fair wear and tear, or has been defaced by stamping, engraving or piercing
whether or not it has been thereby diminished or lightened.
34. The Bank may melt down, break up or deface any coin which has been called in
or tampered with and may deface or destroy any bank note which has been called
in or mutilated.
PART IV
OTHER OPERATIONS OF THE BANK
(a) The Bank as banker to the Governments and other public authorities
35. (1) The Bank shall be the banker, and shall act as the fiscal agent of the
Governments.
(2) The Bank may, subject to such arrangements as may be made with the authority
concerned, act as banker and fiscal agent for any public authority.
36. (1) The Bank, in its capacity as banker and fiscal agent of the Governments
or of any public authority, may be the official depository of the Governments or
public authority concerned and accept deposits and effect payments tor the
account of the Governments or public authority.
Provided that the Bank may, after consultation with the Governments or the
public authority and the bank concerned, select any other bank to be the
official depository of the Governments or the public authority and to:-
(a) maintain and operate special official accounts in accordance with
arrangements made between the Bank and the Governments or public authority
concerned;
(b) act as agent of the Governments for servicing the public debt, including the
issuance of, payment of interest on, and the redemption of, bonds and other
securities of the Governments;
pay, remit, collect or accept for deposit or custody funds in Tanzania or
abroad;
purchase, sell, transfer or accept for custody cheques, bills of exchange and
other securities;
collect the proceeds, whether principal or interest, resulting from the sale
for, accruing to the interest of, the Government or public authority of
securities or other property;
purchase, sell, transfer or accept for custody gold or foreign exchange.
(2) The Bank may, after consultations with the Minister, charge for its services
as banker or fiscal agent of the Governments at such rates as the Bank shall
determine from time to time.
37. (1) Subject to the provisions of this section, the Bank may:
make direct advances to the Government for the purposes of offsetting
fluctuations between receipts from the budgeted revenues and payment of the
Governments;
purchase, hold and sell Treasury bills issued by the Governments which mature
not later than twelve months from the date of issue.
(2)Each advance made to the Governments
under this section shall:
be made solely for the purpose of providing temporary accommodation to the
Governments and shall, accordingly, the repayable within 180 days; and
bear interest at such market rate as shall be determined by the Bank after
consultation with the Minister.
(3) The total amount outstanding at any time of advances made and Treasury bills
held by the Bank under this section shall not exceed one eighth of the average
budgeted revenues of each of Governments as defined in section 39.
38. (1) Subject to the provisions of this section, the Bank may purchase, hold
and sell negotiable stocks, bonds or similar debt obligations or other
securities issued by the Governments which mature not later than twelve months
from the date of issue.
(2) The total amount of securities held by the Bank at any time under subsection
(1 ) of this section shall not exceed the relevant limits set forth in Annual
Monetary and Balance of Payments targets set forth in the Monetary Policy
Statement submitted under section 6 and shall bear interest at such market rate
as determined by the Bank.
39. (1) For the purposes of section 37 the average budgeted revenues of the
Governments shall be the average of the actual collected revenues of the
previous three fiscal years.
(2) Collected revenues shall include taxes, levies, duties and fees, profits and
income from any investment or undertaking and any contribution to the revenue of
the Governments from any political sub-division of the United Republic,
excluding loans, grants and other forms of economic aid and all borrowing
whether short- term or long-term.
40. Except as provided in sections 37 and 38, the Bank shall not extend any
credit directly or indirectly to the Governments or any public authority.
(b) Financial relations with other banks
41. (1) The Bank may open accounts for, accept deposits from and collect money
and other monetary claims for and on account of, banks and financial
institutions and may generally act as banker to banks and financial
institutions.
(2) Subject to the provisions of this Act, the Bank may provide additional
services to banks and financial institutions, including interbank clearings and
the provision of safe deposit facilities.
42. (1)The Bank may on such terms and conditions as it may prescribe, purchase
from, sell to and rediscount on behalf of banks, bills of exchange, promissory
notes and other credit instruments.Provided that the said instruments bear the
endorsement or acceptance of a bank, and mature within 180 days from the date of
acquisition or rediscount by the Bank.
(2)The Bank shall set limits of access to the Rediscount facilities.
43. Bank may on such terms and conditions as it may prescribe, grant loans and
advances to banks and financial institutions for a period not exceeding three
months against the collateral of:
(a)credit instruments satisfying the requirements of section 42;
(b)Treasury hills satisfying the requirements of section 42;
(c)Government securities specified by the Bank; and
(d)other securities specified by the Bank.
For the purposes of this section the word "financial institution"
shall include the Deposit Insurance Fund established under section 23 of the
Banking and Financial Institutions Act, 1991.
44. (1) Except as provided in sections 42 and 43, the Bank shall not extend
credit directly or indirectly to banks and financial institutions.
(2) The Bank shall determine and publish the rates of interest it will charge
for rediscounting instruments in accordance with section 42, and for granting
loans or advances to banks and financial institutions in accordance with section
43.
(c) Control of banking
45. (1) Subject to the provisions of this section the Bank may, from time to
time, require all banks and financial institutions to maintain minimum cash
balances on deposit with the Bank as reserves against the deposit and other
liabilities of the banks and financial institutions. The Bank may prescribe the
form in which such balances shall be held.
(2) The Bank may prescribe different ratios for different kinds of deposits and
other liabilities and may prescribe the methods of computing the amount of the
reserves (which ratios and methods shall apply uniformly to all banks and
financial institutions). The Bank may, at its discretion, exclude certain
liabilities from this calculation.
(3) Any requirement or increase in the ratios prescribed under this section
shall take effect on the expiration of at least thirty days notice to the banks
and financial institutions.
(4) The Bank may impose on any bank or financial institution which fails to
maintain the minimum balances required under this section a penalty charge of
not less than two percentage points at an annual rate above the interest rate
prevailing in the most recent 91 (ninety-one) - day Treasury bill auction on the
amount of the deficiency, and such charge may be recovered by deduction fromany
balance of, or moneys owing to, the bank or financial institutions concerned, or
as a civil debt.
46. (1)Subject to subsection (2) of this section, every bank and every financial
institution shall maintain liquid assets at levels prescribed by the Bank from
time to time.
(2)The Bank may prescribe the methods of computing the ratio for liquid assets,
and may if in the opinion of the Bank it is necessary or desirable to do so,
vary the ratio prescribed under subsection (1) or prescribe different ratios for
different kinds of deposits or other liabilities: Provided that any variation of
the ratio and any prescription of different ratios shall apply uniformly to all
banks and financial institutions and shall take effect on the expiration of
thirty days notice to the banks and financial institutions.
(3)The Bank may impose on any bank or financial institution which fails to
maintain the minimum ratio prescribed under this section, a penalty charge of
not less than two percentage points at an annual rate above the interest rate
prevailing in the most recent 91 (ninety-one) - day Treasury bill auction on the
amount of the deficiency, and the penalty charge may be recovered by deduction
from any balance of, or moneys owing to, the bank or financial institution
concerned, or as a civil debt.
(4)In this section:-
a.the "liquid assets" of a bank or financial institution means its
cash on hand, balances with the Bank, unencumbered short-term securities issued
or guaranteed by the Government of the United Republic of Tanzania and such
other assets as the Bank may specify; and b.the "liabilities" of a
bank or financial institution means its liabilities in Tanzania other than the
paid-up capital reserves, the credit balance in the profit and loss account,
advances taken from the Bank, or such other liabilities as the Bank may exclude.
47. (1) Every bank and financial institution shall furnish to the Bank, at such
time and in such manner as may be prescribed by the Bank, such information as
the Bank may require for the proper discharge of its functions and
responsibilities.
(2) The Bank may publish in whole or in part, at such times as it may decide,
the information furnished pursuant to subsection (1) of this section, but no
information shall be published which would disclose the financial affairs of any
customer of a bank or financial institution unless his written consent has first
been obtained by the Bank.
(3) The Bank may require every bank and every financial institution to publish
its balance sheet in a newspaper of general circulation in Tanzania in such form
and at such frequency as the Bank may prescribe.
(4) The Bank may impose on any bank or financial institution which fails to
furnish information required under this section, a penalty charge of not less
than five hundred thousand shillings per day for every day in which the failure
continues and the penalty charge may be recovered by deduction from any balance
of, or moneys owing to, the bank or financial institution concerned, or as a
civil debt.
48. (1) Notwithstanding any provision to the contrary contained in any written
law, the Bank shall be entitled to access to computers, books, minutes,
accounts, cash securities, documents, vouchers and any other things in the
possession or custody or under the control of the banks or financial
institutions which relate to the business of banks or financial institutions.
2.The Bank may require banks and financial institutions to produce for
examination by a person or persons in the service of the Bank documents and
articles stated in subsection (1).
3.After the conclusion of an examination conducted pursuant to subsection (1) of
this section the Bank shall forward a copy of the Bank's report on the
examination to the Chairman of the Board of Directors of the bank or financial
institution concerned and shall require the said Chairman to cause the same to
be submitted at a meeting of the Board of Directors of the bank or financial
institution concerned and thereafter furnish to the Bank within 21 days of the
date of the report its comments and details on actions to be taken on the issues
raised in the report.
4.If in the opinion of the Bank an examination conducted pursuant to subsection
(1) of this section shows that the business of any bank or financial institution
is being conducted in a manner detrimental to the interests of the bank or
financial institution or the public interest, the Bank may:-
a.require the bank or financial institution concerned forthwith to take such
remedial measures as the Bank may direct, which in the opinion of the Bank are
necessary or desirable in the circumstances; or
b.appoint a person who in the opinion of the Bank is competent to advise the
bank or financial institution on the necessary remedial measures, and every
advice given by a person so appointed shall have the same force and effect as a
requirement of the Bank made under paragraph (a) of this subsection, and for the
purposes of this section the advice shall be deemed to be a requirement of the
Bank.
(5) Every bank and every financial institution required or deemed to be required
to take remedial measures under subsection (3) of this section shall comply with
every requirement affecting its business.
49. (1) Where any bank or financial institution fails to comply with any
requirement of section 48 the Bank may impose on the relevant bank or financial
institution a penalty charge of not less than five hundred thousand shillings
for every day during which non-compliance continues and such charge may be
recovered by deduction from any balance of, or moneys owing to, the bank or
financial institution concerned or as a civil debt.
(2) The provisions of this section shall be applicable notwithstanding the
provisions of any other law currently in force in Tanzania.
(d) External reserves, gold and foreign exchange
50. Bank shall, subject to the provisions of this Act, determine the exchange
rate policy of Tanzania.
51. (1) The Bank shall at all times use its best endeavours to maintain a
reserve of external assets at a level which is, at least equal to four months
imports requirements and the requirements of international transactions of
Tanzania for the same period.
(2) Subject to the provisions of subsection (4) of this section, the reserve of
external assets shall consist of any or all of the following:-
(a) gold;
(b) foreign exchange in the form of—
i.demand or time deposits with foreign central banks or with the Bank's agents
or correspondent abroad;
ii.documents and instruments customarily used for the making of payments or
transfers in international transactions;
iii.notes or coins;
(c) securities of, or guaranteed by, foreign governments or international
institutions and organizations as are referred to in subsection (2) or section
52.
3.The Bank shall from time to time determine the type and form of foreign
exchange and the kinds of securities which may be held in the reserve of
external assets pursuant to subsection (2) of this section.
4.The Bank may include in its reserve of external assets any internationally
recognised reserve assets being a reserve asset not included in subsection (2)
of this section, including:-
a.the reserve position of Tanzania in the International Monetary Fund; and
b.holdings and special drawing rights of Tanzania, which the Bank, after
consultation with the International Monetary Fund considers suitable for
inclusion in the reserve.
52. (1) Subject to the provisions of this section, the Bank may:-
b.acquire and transfer balances in foreign currencies, hold such balances with
foreign central banks or with the Bank's agents or correspondents abroad, and
invest such balances in marketable foreign securities;
c.acquire, hold and transfer, and effect transactions of any kind in foreign
exchange.
(2) The Bank may engage in foreign exchange transactions only with—
(a) banks;
(b) the Governments;
(c) a public authority;
(d) foreign central banks, foreign banks, or foreign financial institutions;
(e) foreign governments or agencies of foreign Governments;
(f) international financial organisations orinstitutions;
(g) any other person whom the Bank may prescribe for the purposes of this
section.
(3) The buying and selling rates in transactions authorized by this section
shall be in accordance with international agreements to which Tanzania is a
party or with which Tanzania is associated.
53. The Bank shall exercise such functions in the administration of any law
relating to the control of the import, export, purchase, sale or other
transaction in foreign exchange and gold as may arise under such law.
54. The Bank shall administer any payments agreement entered into by the
Governments.
55. (1) The Bank shall be the fiscal agent for all the Governments' transactions
with international financial organisations or institutions of which the
Government of the United Republic of Tanzania is a member.
(e) Miscellaneous powers and functions
56. The Bank may open accounts for, accept deposit from, and collect money and
other monetary claims for and on account of, foreign central banks, foreign
banks and foreign financial institutions, and may generally act as banker to
such banks and institutions.
57. The Bank may promote and subscribe to, hold, and sell share or as the case
may be, acquire an interest in any corporation established for the purposes of
promoting the development of financial markets or of improving the financial
machinery and payment systems in Tanzania.
Provided that the total value of the Bank's holding of any shares or interest
shall not at any time exceed fifty percent of the aggregate of the Bank's paid
up capital and of the General Reserve Fund of the Bank.
58. The Bank may, if in its opinion, circumstances render it desirable and
prudent so to do, pay interest at such rate and subject to such qualifications
as it may determine on cash balances deposited with the Bank in accordance with
section 45 or on the balances in any amount with the Bank which is a blocked
account within the meaning of the Foreign Exchange Regulations, 1992.
59. (1) The Bank may advise the Governments on any matter relating to its
functions, powers and duties under this or any other law and shall advise the
Governments when in the Bank's opinion, any such matter is likely to affect the
achievement of the principal objectives of the Bank as set forth in section 5.
(2) The Governments may require the Bank to give its advice on any matter
relating to the functions, powers and duties of the Bank and credit conditions
in Tanzania or any proposals, measures or transactions relating thereto, and the
Bank shall give its advice accordingly.
(f) Prohibited operations
60. (1) The Bank shall not—
(a) save as expressly authorized by this Act, engage in trade, or own or acquire
any direct interest in any commercial, agricultural, industrial or similar
undertaking except in the course of obtaining satisfaction for any debt due to
the Bank;
(b) purchase, acquire or lease immovable property for any purpose except as
premises for the Bank (including reasonable provision for anticipated future
requirements) or for the use of the members of the Board or of the staff of the
Bank;
(c) guarantee any loan, advance or investment.
(2) Where, in the case provided in paragraph (a) of sub-section (1), the Bank
acquires any interest to which that paragraph refers, the Bank shall dispose of
the same at the earliest suitable opportunity.
PART V
Miscellaneous
(a) General
61. The Governments shall not hold or maintain any reserve of external assets
except to the extent necessary for working balances.
62. Save with the written consent of the Bank no bank shall be registered
hereafter under the provisions of any law in force in Tanzania by a name which
includes any of the words "Central", "Government" and"
Reserve".
63. In the discharge of its functions under this Act deemed and in the
administration of any law to which section 53 refers, the Bank, and the members
of the Board and of the staff of the Bank, shall be deemed, for the purposes of
the National Security Act, 1970 to be persons holding office in the service of
the United Republic.
64. In addition to any other persons in respect of whom the Permanent Commission
of Enquiry has jurisdiction, the Permanent Commission of Enquiry shall have
jurisdiction to enquire into the conduct in the exercise of their respective
offices or authorities, or in abuse thereof, of the members of the Board and the
members of the staff of the Bank, and, accordingly, the Bank is specified for
the purposes of subsection (4) of clause 129 of the Constitution of Tanzania,
1977.
65. Notwithstanding the provisions of any other law, no action or other
proceedings shall lie or be instituted against any member of the Board of the
Bank, Standing Committee or employee for or in respect of any act or thing done
or omitted to be done in good faith in the exercise of his powers conferred by
this Act.
66. If there is any conflict between this Act and the provisions of the Banking
and Financial Institutions Act, 1991, or of any other Act relating to any bank
or to the business of banking, the provisions of this Act shall prevail.
(b) Repeals and savings
67. The Bank of Tanzania Act 1965, is hereby repealed
68. Notwithstanding the repeal of the Bank of Tanzania Act, 1965:-
(a) all regulations, rules, orders, directions or other subsidiary legislation
made, given or issued under that Act and which are in force before the effective
date shall remain in force after the effective date until they are repealed or
replaced by subsidiary legislation made under this Act;
(b) all appointments made under that Act and which have not been revoked
immediately before the effective date shall on and after the effective date
remain in force until they are revoked or fresh appointments are made under this
Act;
(c) all legal proceedings instituted or orders made under that Act shall
continue and be deemed to be proceedings or orders made under the provisions of
this Act
Passed in the National Assembly on 17th day of February, 1995.
G. F. Mlawa
CLERK OF THE NATIONAL ASSEMBLY
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